How to Get Capital One Personal Loans
Your search for personal loans might bring you to Capital One, one of the biggest U.S. banks that is well-known for its credit cards and online banking accounts.
Although Capital One offers many types of loans, they do not offer personal loans.
Personal loans are unsecured loans that you can get without offering any collateral.
Unlike a mortgage or car loan where the bank can repossess what you purchased with the loan, otherwise known as a secured loan, the bank is solely trusting your word that you will pay the loan back.
You can use personal loans for a variety of purposes, such as debt consolidation, home improvement, or paying unexpected bills.
Learn which lenders provide personal loans and see which loans are actually offered by Capital One.
Where to Look for Personal Loans
Even though Capital One doesn't offer them, there are many companies that do offer personal loans:
Upstart
Upstart offers personal loans in amounts as large as $50,000 to its customers. Depending on the terms of your loan you can take three or five years to pay it back, but there’s no prepayment penalty.
Upstart’s draw is its specialized formula for assessing your creditworthiness.
Your education, job history, and what subjects you studied are taken into account alongside your credit score. If you have a stable job in an in-demand field, your interest rate could be lower than you expect.
Lending Club
Lending Club is a peer-to-peer lending service. Borrowers can get personal loans as large as $40,000 from groups of lenders made up of other regular people.
When you apply for a loan, investors will see the details, such as the amount and the purpose of the loan.
They can then decide whether to help fund the loan and how much money to provide. Your loan could be funded by multiple investors.
Lending Club asks borrowers to provide the reason for requesting the loan. The company offers loans for debt consolidation, vacations, home improvement, and medical bills.
Santander Personal Loans
Santander Bank is one of the larger banks in the country that offers personal loans.
They are delivered as a lump sum to your checking account in amounts ranging from $5,000 to $35,000.
You can use the money to consolidate other loans or fund an expensive project with large upfront costs. The repayment period could be as long as 5 years.
How to Apply for Personal Loans
When you apply for a personal loan the lender will request information that it will use to verify your identity.
It will also use the information to determine your creditworthiness and whether you can make the monthly payments.
Some of the information you’ll need to provide includes:
- Name
- Address
- Date of birth
- Proof of identity, such as a driver’s license
- Social Security number
- Proof of income, such as bank statements or pay stubs.
- Verification of employment
Though the list can seem daunting, providing more information is a good thing to do.
Lenders who do their due diligence and ask for a lot of information can more accurately determine your chances of defaulting on the loan.
That means they can more accurately set interest rates, so if your credit is good, your loan will be cheaper.
Personal Loan Calculator
How to Increase Your Chances of Getting Approved for a Personal Loan
To improve your odds of getting approved for a loan, there are a few steps you should take.
The first is improving your credit score. In the short term, the best way to do that is to reduce your credit utilization and remove derogatory marks from your credit report.
You can reduce your utilization by paying down your credit card balances. Maxing out your credit limits does not inspire confidence in a lender.
To remove derogatory marks from your credit report you can try contacting your previous lenders to organize a pay-for-delete agreement.
Another way to increase your chances of getting approved is to reduce your debt to income ratio.
If you pay down other debts or increase your income, you’ll have more cash available to make payments on your new loan.
Which Loans Are Available at Capital One
Capital One offers a wide variety of banking services and loans to its customers. Some of the types of loans that the company offers include:
- Credit cards
- Auto loans
- Mortgages
- Home equity loans
- Home equity lines of credit (HELOCs)
- Small business credit cards
Credit Cards
Capital One is known for its credit card offerings, including travel rewards cards, cash back cards, and cards to help build credit.
Credit cards are a type of unsecured loan. There’s no asset that the lender can repossess if you fail to pay your bill.
That means interest rates can be very high. When you use your credit card, the amount paid will be added to your balance. If you don’t pay the balance in full by the payment due date, you’ll start incurring interest.
Though the rewards can be lucrative, they’re quickly canceled out by interest, so make sure you can pay the bill in full before using a credit card.
Auto loans
Capital One offers loans for the purchase of both new and used vehicles. You can also refinance your existing car loan through the bank. That can help you reduce your monthly payment or save on interest.
Depending on whether the car is new or used, it’s make, and model year, the interest can vary widely.
Mortgages
A mortgage is a loan taken out for the purpose of purchasing real estate, whether it be a home or an investment property.
Capital One offers new mortgages as well as mortgage refinancing to its customers.
Because mortgages tend to be for large amounts of money, as high as $1 million or more, the loan term is very long.
Capital One offers fixed-rate loans with fifteen or thirty-year terms. You can also get an adjustable rate mortgage (ARM).
With a fixed-rate mortgage, you lock in the interest rate for the life of the loan when you purchase your house.
No matter how long you have the loan, the interest rate will stay the same. The only way for it to change is if you choose to refinance the loan.
An adjustable-rate mortgage usually has a lower interest rate than a fixed-rate loan, at least at first.
Once the initial period expires, the interest rate can be changed on a regular basis.
A 5/1 ARM, for example, locks in the initial rate for five years but allows the lender to change the rate every year after that period. Still, ARMs can be a good deal if you expect to move or plan to pay the loan in full very quickly.
Home equity loans
Home equity loans let you turn the value of your home into cash you can use for other purposes. Like a mortgage, home equity loans are backed by your home’s value, so if you fail to pay, the lender could repossess your home.
You are compensated for that risk with lower interest rates than you could get on unsecured loans, like a credit card.
Home equity loans are distributed to you as a single lump sum. Once you’ve taken the loan you’ll have to make monthly payments until it is paid off. This makes them best for large expenses like home improvement projects.
Home equity lines of credit (HELOCs)
A home equity line of credit turns your home’s value into a pool of cash that you can draw from.
Your lender will give you a credit limit and you can withdraw cash up to that limit. You can also choose not to withdraw cash, leaving the HELOC open in case you need it.
If you do withdraw cash from the HELOC, it works a lot like a credit card. If you don’t pay it back before the due date, you’ll have to pay interest on the loan. If you don’t have a balance on the HELOC, you won’t have to pay at all.
Because HELOCs provide on-demand access to cash, they’re best for when you have uncertain income or expenses and need the extra liquidity.
Conclusion
Though Capital One doesn’t offer personal loans they can be a useful financial tool. If you are in need of one, there are many companies that will compete for the chance to make a loan to you.
